In 2022, when lawmakers in Kentucky failed for the third consecutive year to pass a bill legalizing online poker in the state, supporters promised it wouldn’t be the last word on the issue.
Now the Kentucky online poker supporters are back and have a new bill they want their colleagues to support in 2023.
To be clear, aficionados of online poker in the Bluegrass State should temper their expectations. After all, Kentucky is a ruby red conservative state that has so far resisted expanding gaming beyond the state lottery, horse racing, and historical horse racing machines. And attempts to legalize online poker (and real money sports betting in KY) all failed in 2020, 2021, and 2022.
But the latest bill, HB 106, does have a chance at passage. Here’s everything you need to know about the bill and where we go from here.
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Ohio Could Force Kentucky’s Hand
One major difference between April 2022 — when Kentucky’s last attempt to legalize online poker and sports betting ran aground — and today is that neighboring Ohio has since launched sports betting.
It’s a big difference, especially considering the two-day New Year’s holiday when Ohio sports betting went live wound up having a bigger weekend for geolocation transactions than any other US state over that same two-day period.
Ohio is also a short drive for a large portion of Kentuckians, and many of them appear to be making the trip. Data from GeoComply Solutions show that Cincinnati, a city just across the river from Kentucky, had the highest number of geolocation transactions on January 1 and 2.
Word of Ohio’s good fortune is likely to travel down to Frankfort, where lawmakers in the Kentucky General Assembly could decide they’ve left enough money on the table for Ohio and its other neighbors (Illinois, Indiana, Tennessee, Virginia, and West Virginia) that also have legal sports betting.
Poker Licenses Would Be Standalone
HB 106 would allow online poker through standalone licenses not tied to any of the state’s seven horse racetracks. Operators would pay an initial licensing fee of $250,000 and would also pay $10,000 for annual renewals. Online poker would be taxed at 6.75%.
One bit of bad news is that the bill doesn’t include any language allowing multi-state poker, or that gives the state the authority to join a multi-state compact like the Multi-State Internet Gaming Agreement (MSIGA). Membership in such a compact would help online poker in Kentucky thrive, with shared player pools and liquidity across multiple states leading to more tournaments and bigger prizes.
Poker likely won’t work in Kentucky if it’s a segregated market like neighboring West Virginia. The state ranks 26th in population, with 4.5 million residents, so it seems unlikely that any online poker operators would launch in the state if it wasn’t a member of a multi-state compact.
Sports betting is the bigger draw. HB 106 would allow sports betting through seven horse racetracks in the state. Each track would be allowed one online skin and could build up to two retail sportsbooks within a 60-mile radius of the track under certain conditions. Online bets would be taxed at 14.25%, while retail bets would be at 9.5%.
HB 106 would also allow daily fantasy sports (DFS) betting without being tied to a track.
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What Happens Now?
The bill has three sponsors but will need much more support to become law.
Reps. Derrick Graham (D-Frankfort), Rachel Roberts (D-Newport), and Cherlynn Stevenson (D-Lexington) introduced the bill on January 5. The bill was subsequently referred to the House Committee on Committees.
Initial backing for the bill has switched parties. Rep. Adam Koenig (R-Erlanger) has been one of the most vocal supporters of online poker and sports betting for the past three years. But Koenig lost his Republican primary last year and is now out of office.
HB 106’s support doesn’t come from political novices. Last month, Kentucky House Democrats elected Graham as floor leader, Stevenson as caucus chair, and Roberts as whip.
The Democratic trio will need support from their colleagues quickly. Under the state constitution, the legislature only meets for 30 days in odd-numbered calendar years, compared to 60 days in even-numbered years. The legislature will adjourn sine die on March 30.
In another twist, the state constitution also stipulates that during odd-numbered years, any bill that would raise revenue must receive the backing of three-fifths of the lawmakers in both the House and the Senate.
That means HB 106 will need support from at least 60 lawmakers in the House. By comparison, last year’s bill passed the House on a 58-30 vote.
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